Real estate fraud can result in large financial losses for consumers. Victims of real estate fraud find out too late that they no longer own their homes, there have been additional mortgages taken out in their name, or their credit history has been affected.
How does it happen?
Two types of real estate fraud that may result in financial loss for consumers: title fraud and foreclosure fraud.
Title fraud happens when the title to the home is stolen, and then the fraudster sells the home or applies for a new mortgage against it. Title fraud usually starts with identity theft.
Foreclosure fraud happens when home owners are having problems making their payments. Victims are tricked into transferring their property title in return for a loan that will help them make their payments. The fraudsters usually keep the payments you make and also have the title to your home, which they can resell or remortgage.
How to prevent it
Protect your personal financial information.
Contact your mortgage lender first if you are having difficulty making your mortgage payments.
Consult your lawyer before giving another person a right to deal with your home or other assets.
Research the company or individual who is offering you the loan.
Do a land title search with your provincial or territorial land registry office. This search will show the name of the property owner and any mortgages or liens registered on the title.
Consider buying title insurance to protect against title fraud. Title insurance covers losses related to title fraud.
What to do if you become a victim
If you think you are a victim of fraud, take the following steps:
Start a written log: write down when you noticed the fraud and the actions you took, including names of people you spoke to and dates of communications.
File a report with your local police.
Contact your financial institutions and any other companies (e.g. phone company, cable provider, etc.) where your accounts were tampered with, or are at risk of being tampered with.
Call your provincial or territorial land registry office.